Saturday, November 7, 2009

Institutions play a critical role in the development of financial markets.

It's easy to see the importance of those who establish the regulatory and operational architecture of the system:

Legislators who establish the laws

Regulators who translate those laws into specific regulations and procedures and then enforce them

Accounting Standards Setters - IASB, FASB and particularly relevant to the GCC because of its specialist focus on Shari'ah compliant financial institutions AAOIFI

For listed securities, exchanges who establish listing and trading rules and provide a forum in which buyers and sellers can conduct transactions

Various professional groups that establish conventions for dealing

Brokers and custodians

The Reuters and Bloombergs out there who provide the instruments through which market information is made available and often the mechanism for conducting trades

But there is another group with a key role, those who provide information to investors to help them make more informed investment decisions and those who take actions to set or encourage the development of industry practice and standards:

Research firms - not only for company research but also research on sectors, individual countries and macro trends as well as investment strategies